The building is owned by Kai Point Coal, and managing director Blair Cross said the building would be demolished "in due course".
"It's well beyond its use-by date, and has been for the last 20 years."
The theatre was bought by the company in the early 1990s.
It was not in good condition at that time, he said.
South Otago Museum curator Gary Ross said the building was contructed in 1901 as an Oddfellows hall and converted into a picture theatre about 1935.
"We've been calling it an Art Deco, but it's actually a Victorian building."
Clutha District Council district inspector Ray Applegarth confirmed a building consent to demolish had been issued on December 14.
Structural problems had been highlighted, but the council had not taken things "to the next level, because the owner chose to self-impose", he said.
Mr Cross said the site had commercial potential, but there were no plans for what might replace the picture theatre.
The 75-year-old former Clutha County Council building which stood on the corner of Clyde and Elizabeth Sts was demolished last October. It was also owned by Mr Cross, who said there were still no concrete plans for development of the site.
